In August 2012, former Bank of Canada governor Mark Carney derided Corporate Canada for sitting on a large pile of “dead money.” In effect, Carney called out the country’s business leaders as a bunch of wimps. Carney had orchestrated some of the lowest borrowing costs on record, and still executives executives and business owners refused to invest. But who could blame them? The European debt crisis threatened to pull apart the euro zone only a few years after the world endured the greatest financial calamity since the Great Depression. It was scary out there.
Carney took some heat for those remarks. He had an impressive track record in investment banking, but he had never run a business. Bosses grumbled that Carney was out of his element and that if there was money to be made, they would be making it. But what if Carney knew more about Canadian corporate culture than his critics cared to admit? Four years have passed and companies remain largely on the sidelines. Business investment declined for six consecutive quarters through the first half of this year, according to the most recent figures from Statistics Canada. Nor is there a reason to expect a rebound anytime soon. The Bank of Canada in July described the investment intentions of Canadian companies over the year ahead as “modest.”
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